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April 2011
Game onMega-event infrastructure opportunities
At a glance
The quality of a region’s infrastructure denotes its potential
for growth well into the future.
Investment in mega-event-related infrastructure can accelerate
economic development by as much as three decades.
Cities and regions turn to public-private partnerships for
access to capital and risk mitigation.
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Today, winners of mega-event bids should begin planning far
ahead of the actual event, often a decade or longer in advance,
recognizing that success in hosting a mega-event must include the
supporting infrastructure required for participation, by both
athletes and spectators. In fact, inadequate infrastructure
planning or follow-through might well upend the perception of
impressive achievement: Reports documenting the potential lack of
adequate infrastructure have sometimes dominated the news in the
weeks and months leading up to a mega-event. Those reports have the
potential to jeopardize the positive image a city or country is
aiming to build. To avoid such a scenario, advance planning is
essential. So is the importance of demonstrating the lasting benefi
t of that infrastructure investment, a true legacy for
the community.
In the excitement that grips a host city immediately after a
selection announcement, ideas and vision abound. Translating those
ideas and that vision into reality, however, is more elusive. To
maintain clarity of vision, city leaders are well advised to test
the long-term viability of each
PwC Game on: Mega-event infrastructure opportunities2
The transformative effect of well-thought-out supporting
infrastructure for a mega-event like the Olympics or World Cup
football has long-lasting economic, demographic, and social
implications for the entire region. How a government body—national,
regional, or municipal—plans for the legacy of supporting
infrastructure can have a ripple effect on the development of a
region for decades to come.
More than 4 billion people worldwide tuned in to the Beijing
Olympics in August 2008, the largest global television audience on
record. A lavish extravaganza that cost billions of dollars, the
Beijing Games were the most expensive to date. And while the world
watched, China took center stage. The global audience tuned in to
watch athletes compete, but they also saw contemporary China in a
whole new light. This opportunity to capture the world’s attention
for a few weeks—and the ensuing lasting legacy—exemplifi es both
the intangible and the tangible essence of mega-events.
Indeed, the legacy of a mega-event is very tangible: An October
2009 report by two economists, Mark Spiegel from the Federal
Reserve Bank of San Francisco and Andrew Rose from the University
of California, Berkeley, found that hosting a mega-event like the
Olympics or the FIFA World CupTM permanently boosts trade by 30
percent. Their study of 196 countries’ economic performance between
1950 and 2006 found that the “Olympic effect” derives from host
countries signaling their intention of moving toward a more open
trade policy.1
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3
Taking the long view
Providing adequate transportation, utilities, clean water, and
sanitation for thousands of athletes and millions of spectators at
a mega-event like the Olympics or the World Cup, governed by the
Fédération Internationale de Football Association (FIFA), is no
mean task. But what becomes of that supporting infrastructure after
the athletes and spectators have gone home? While the eyes of the
world are on the events, athletes, and facilities for a few weeks
during a mega-event, the transformative effect of well-thought-out
supporting infrastructure has long-lasting economic, demographic,
and social implications for the entire region. How a government
body—national, regional, or municipal—
plans for the legacy of supporting infrastructure can have a
ripple effect on the development of a region for decades to
come.
In Spain, Barcelona used the 1992 Olympics as a catalyst to
speed up previously established goals for urban regeneration. The
city constructed ring roads that eased long-term traffi c
congestion, renovated its airport, restructured public
transportation, improved public parks and the lakefront, upgraded
its telecommunications system, and modernized its sanitation
system. With every intention of benefi ting the residents and
businesses of Barcelona over the long term, local planners
undertook a massive effort to transform the city.2
anticipated project. How does the vision for mega-event
investment correspond with the region’s long-term needs and
objectives? Which fi nancing models best apply in each case? What
role does sustainability play? What are the projected maintenance
costs? How will procurement occur? What kind of oversight should
govern the process? PwC understands each of these critical success
factors and barriers. In the following pages, we will analyze the
infrastructure investments that a sample of host cities has made.
We will also examine the long-term implications for each region
where those investments occurred. Our experience advising
organizing committees, contractors, and host countries allows us to
discern—from the perspective of an infrastructure investment—the
factors that create a lasting legacy for a host city or
country.
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But the Games weren’t the sole catalyst for this evolution,
according to Stephen Essex, associate professor at the UK’s
University of Plymouth, who researches infrastructure implications
of the Olympic Games. He says the Olympics “simply speeded up the
renewal that had already been planned to take place over 50 years”
in keeping with the region’s 1976 General Metropolitan Plan of
Barcelona. According to Essex, organizers had already “mobilized
public support through neighborhood projects that had established a
consensus for change.” Meanwhile, existing facilities with planned
upgrades served as many of the main Olympic venues. And public
sector support was substantial, Essex says, impelled by the end of
the Franco period as well as an upsurge in regional identity.3
In fact, Barcelona spent six times as much on infrastructure
(both Games infrastructure and supporting infrastructure) as it did
on organizing the event itself. And four previously neglected urban
areas were a part of the plan for citywide Olympic facilities,
which allowed city planners to allocate resources for comprehensive
redevelopment.4 As a result, the 1992 Games thrust Barcelona into
the top tier of Europe’s tourist and business destinations; the
mayor of Barcelona said the city experienced a metamorphosis within
fi ve years that would otherwise have taken three decades.5 In
fact, thanks to infrastructure investment and brand equity in the
wake of the Olympics, tourism revenues more than doubled in
Barcelona.
However, public support—and resources—are not always enough.
Private funding, expertise, and oversight are often required to
bridge the gap between what the public sector can realistically
achieve and what the mega-event actually requires. In addition to
almost $5 billion committed by the public sector, the Barcelona
Olympics attracted some $7 billion
PwC Game on: Mega-event infrastructure opportunities4
In anticipation of increased consumption during the 2014 Winter
Olympics in Sochi, 200 new facilities will power up incrementally,
increasing the energy capacity of the Sochi power grid by 250
percent.
250%
in private-sector fi nancing.6 Today, municipalities hosting the
Olympics and other major events like the World Cup increasingly
explore private-sector options as a way to better manage fi nancing
concerns for supporting infrastructure. More recently, some cities
and regions have turned to public-private partnerships (PPPs) as a
viable solution. Best suited to large-scale infrastructure assets
with ongoing maintenance requirements, PPPs are increasingly used
to secure additional fi nancing, better manage risk, and increase
transparency and accountability. (For more on PPPs, see page
15.)
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Investing for optimum return
While the total amount invested in a mega-event is always high,
it can vary widely, based on how much infrastructure already
exists. China invested approximately $40 billion in infrastructure
alone between 2002 and 2006 to prepare for the Olympics, building
some 40 new stadia and athletic facilities, doubling the capacity
of Beijing’s subway system, completing the light-rail system,
building and improving roads, and constructing a new airport.7
Olympic-related investment accounted for up to 15 percent of
overall economic investment between 2002 and 2008.8 What the city
gained was an enormous—and enormously overdue—investment in its
basic infrastructure and in its public spaces, according to William
Kirby, director of the Fairbank Center for Chinese Studies at
Harvard University. Kirby describes the new airport as “stunning,
larger than all of Heathrow, and perhaps the most beautiful on
earth”.9 And by easing air traffi c congestion as a result of fewer
fl ight delays, the airport also provides
A 2010 World Economic Forum report found that underinvestment in
infrastructure is a top 10 economic risk for the entire global
landscape because infrastructure is the foundation of a region’s
prosperity and resilience.
long-term economic benefi t.10 Post-Games, Beijing is a top
performer in the infrastructure category, according to a 2010 PwC
report on global cities. Despite lingering urban mobility
challenges, it has the lowest user cost of public transportation of
the 21 cities evaluated.11
London, meanwhile, expects to spend some $15 billion for the
Olympic Park under construction in East London and the regeneration
of the entire region, including transportation, bridges, utilities,
and walkways. Olympic Village, which will house the athletes during
the Games, will provide private as well as government-supported
housing for London residents after the Games. A report from the
UK’s National Audit Offi ce says that “Olympic Park will be a
blueprint for sustainable living and help to transform the heart of
East London,” historically a less developed part of the city.12
Meanwhile, several long-term transportation projects estimated at
about $8 billion, while not being delivered specifi cally for the
Olympics are nevertheless essential for the success of the Games,
according
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to the National Audit Offi ce report. These projects include
widening of the M25 motorway around London and upgrading rail links
to Olympic venues, such as the West Coast mainline and the Channel
Tunnel Rail Link. The M25—the second longest ring road in Europe at
117 miles—was procured as a PPP and fi nanced entirely with private
funding.13, 14
New opportunities for investors
Investing in infrastructure offers a multitude of economic and
social benefi ts to the region itself. It also offers a wealth of
opportunity to international investors seeking new markets. Brazil,
for example, is expected to invest some $83 billion in
infrastructure from 2009 to 2016 to prepare for World Cup football
in 2014 and the Olympics in 2016. More than 1,200 projects have
already been identifi ed for the World Cup, which is expected to
draw 3 million Brazilians and 600,000 international visitors.15, 16
New infrastructure projects will include airports, roads, public
transportation, and sanitation. A public-private partnership is
likely among the best options to fi nance a high-speed train
line—estimated
to cost $20 billion—that would serve both the Olympics and the
World Cup.17 Private investors from the Middle East, Europe, and
the US have expressed interest in these infrastructure projects.
Even more pressing is the need to upgrade Brazil’s airports.
Increased capacity is essential for handling the volume of foreign
visitors expected to attend both mega-events; public-private
partnerships offer an ideal option for
airport development.
Meanwhile, in Sochi, Russia, site of the 2014 Winter Olympics,
the Russian government is actively soliciting participation in
public-private partnerships. City and regional planners expect the
Games to transform both Sochi and the Krasnodar region in southern
Russia, 1,000 miles south of Moscow, into a state-of-the-art
year-round resort—with more than 220 miles of roads and bridges,
some 125 miles of railroad track, 22 tunnels, telecommunications
upgrades, almost 300 miles of gas pipeline, and a modern
international airport.18
The Sochi Olympic bid calls for approximately 50 infrastructure
projects in all. A new high-speed
PwC Game on: Mega-event infrastructure opportunities6
The mayor of Barcelona said the city experienced a metamorphosis
within fi ve years of the 1992 Olympics that would otherwise have
taken three decades.
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7
railroad will be able to transport 8,500 passengers per hour,
moving passengers between the coast and the mountains in less than
40 minutes. Some 200 new power plants are slated to increase the
energy capacity of the Sochi power grid by 2.5 times its existing
capacity. They will power up incrementally, in anticipation of
increased energy consumption. And $500 million worth of new
telecommunications infrastructure will allow digital transmission
and mobile communication. City and regional offi cials have thus
planned for transportation, energy, and telecommunications
infrastructure that will benefi t residents and local
businesses long after the 2014 Winter Games.19 Already a
regional tourist destination, Sochi is poised to evolve into an
international tourist destination after the Olympics.
Russia is also planning ahead for 16 stadia across 13 cities in
anticipation of World Cup football in 2018. Much of the massive
infrastructure investment required for this event—4,800 miles of
roadway and 1,200 miles of railroad—will occur outside Russia’s
main cities of Moscow and St. Petersburg, where almost none of the
infrastructure currently exists.
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8 PwC Game on: Mega-event infrastructure opportunities
1. Supporting infrastructure worksbest when it is part of the
region’s long-term plan for growth.Barcelona already had a 50-year
development plan in place;Vancouver’s transit project,Canada Line,
had been partof the region’s long-term planfor decades.
2. Urban regeneration offers long-term payoffs. Sydney’s
Wentworth Point, formerly known as Homebush Bay, usedto be a
3-square-mile area of unusable swampland with meat-packing
facilities, some industrialfacilities, and a munitions dump before
the 2000 Olympics transformed it into a thrivingresidential
neighborhood.a
3. A holistic approach translatesvision into reality:
Well-thought-out project defi nitionobjectives, transparent
controland accountability, structured project oversight, a clearly
defi ned time line, and robust communication and reportinghelp
ensure successfulcompletion of these
large-scaleinfrastructure projects.
4. Legacy planning for stadia, especially large venues, is
crucial.Qatar, for example, plans tobuild modular venues for World
Cup 2022, then dismantle thempost-event and ship them to developing
nations.
5. Public-private partnershipsoffer additional fi
nancingoptions, specialized expertise,and risk transfer, as in the
caseof the Canada Line rapidtransport system and WhistlerHighway
expansion in Vancouveras well as the M25 motorway expansion
in London.
6. Public-sector commitmentto long-term partnerships
isessential. In the case of theM25 expansion, for example, when
private fi nancing becameless certain, the UK’s Departmentof
Transport committed up to $790 million to save the project.In the
end, private funds fi nancedthe entire endeavor;
however,public-sector commitment was essential to success.b
7. Collaboration among various levels of
government—federal,state, and local—is essentialto mega-event
infrastructure planning and investment. Riode Janeiro won the bid
to hostthe 2016 Olympics only afterall three levels of
governmentcollectively committed thenecessary resources. Having
learned from two unsuccessfulattempts, they worked together the
third time tomeet the InternationalOlympic
Committee’sinfrastructure requirements for a successful bid.
Infrastructure investment: What works best?
Some mega-event host cities have done a far better job of
investing prudently in infrastructure than others. Below are some
of the priorities that ensure a lasting legacy:
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9
As with all mega-events, the challenges in Russia include
securing funding, attracting private investors, completing
construction on time, and ensuring proper planning for legacy
use.
Like the Russian government, the South African government
actively solicited private participation in infrastructure, specifi
cally foreign direct investment. The government provided incentives
for foreign
new airport with a longer runway for larger airplanes is the
country’s fi rst new airfi eld in almost 100 years. The World Cup
also accelerated initial completion of the country’s fi rst
high-speed rail system. The 50-mile rail line linking Johannesburg
to Pretoria is one of the country’s largest infrastructure
projects, according to South Africa’s Department of
Transport.20
To prepare for the 2010 World Cup, the South African government
committed a fi rst tranche of $52 billion toward energy generation
and distribution, rail transportation, and ports.
companies to partner with local businesses. While wider
infrastructure development has long been a goal of the South
African government, the 2010 World Cup—the fi rst sports mega-event
held on the African continent—accelerated much of the planning and
development. In fact, the government embarked on an ambitious
infrastructure development undertaking in 2008, committing a fi rst
tranche of $52 billion toward energy generation and distribution,
rail transportation, and ports. In preparation for the World Cup,
the government invested more than $4 billion on infrastructure,
implementing extensive road, rail, and airport upgrades. And a
brand
Infrastructure investment offers competitive advantage
A lasting mega-event legacy, infrastructure provides the
economic and social foundation of a region’s prosperity: Workers
spend less time getting to and from work, businesses move products
and supplies more quickly, and transportation costs decrease. A
2010 PwC report found that infrastructure correlates directly with
a region’s “livability,” which is an economic asset.21 In fact, the
quality of a region’s infrastructure indicates its potential for
growth well into the future. In the context of a mega-event,
selection committees
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10 PwC Game on: Mega-event infrastructure opportunities
look carefully at infrastructure from a more practical
perspective. They want to be sure that the city can accommodate the
athletes and spectators during the actual event—house and transport
them—while the mega-event itself functions smoothly.
The task of looking beyond the actual event becomes the
responsibility of the host city, region, and country. Legacy
planning has become a major component of hosting a mega-event, not
least because of the long-term competitive advantage that
infrastructure offers. And global demand for infrastructure will
continue to expand signifi cantly in the decades ahead, according
to the Organization for Economic Cooperation and Development
(OECD), driven by global economic growth, technological
progress,
climate change, urbanization, and growing congestion.22
Legacy planning was certainly a consideration in the Sydney
Olympics, as evidenced by analysis from the New South Wales
Treasury’s Offi ce of Financial Management, which identifi ed the
development of major facilities and infrastructure as a driver of
business benefi t well in advance of the 2000 Sydney Olympics.23 In
the post-Games assessment, PwC reported that the public and private
sectors in Sydney invested some $2 billion on the construction of
venues and infrastructure built specifi cally for the Games. In
addition, regional infrastructure construction completed in time
for the Olympics but not undertaken specifi cally for the Games
amounted to another $2 billion or so. New construction and upgrades
included refurbishing
The monorail project in Manaus, in anticipation of World Cup
2014, is one of Brazil’s most ambitious urban mobility projects to
date, an excellent example of how a mega-event can impel regional
long-term infrastructure investment.
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the Sydney airport, building new expressways, upgrading several
railway stations, and improving the sanitation system.
The upgrade of the Sydney airport, which cost approximately $1.5
billion, almost doubled its capacity to handle international
passengers and added a new rail link. The local telecommunications
operator upgraded its capacity at a cost of several billion
dollars, which allowed for more than 500,000 mobile telephone calls
in Olympic Park during the opening ceremony, a record-setting
number in the year 2000 at one event.24 Today, Sydney ranks as a
top performer in PwC’s 2010 report on global cities. The city leads
in business, political, and quality-of-life variables ranging from
urban livability to housing, green space, air quality, congestion
management, and carbon footprint.25
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12 PwC Game on: Mega-event infrastructure opportunities
A mega-event can advance that sometimes elusive economic asset
of livability, often by a decade or more, as proven by Barcelona.
And Munich’s acceleration of transportation and infrastructure
projects in preparation for the 1972 Games allowed the city to
hasten urban development by as much as
an entire decade.26 In Atlanta, dormitories built to house
athletes at the 1996 Olympics now house 10,000 university students.
Meanwhile, the conversion of commercial space to residential has
attracted more than 100,000 new residents to the downtown area
since the year 2000. These newer residents
represent a reversal of the 1970s and 1980s population trend,
when some 100,000 residents moved to the suburbs.27, 28 And a
21-acre section on the edge of downtown Atlanta, previously a
blighted industrial district, is now among the largest urban green
spaces in the US.29
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Poised for transformation
PwC research has found that a city or region needs to excel in
four essential dimensions to capture attention on the world stage:
quality services to residents and businesses, sustainable
development, visionary leadership, and consistency of image. Cities
and regions already poised to achieve transformation in these
dimensions are best suited to use the mega-event to accelerate that
transformation, as did Barcelona with
Russia, South Africa, and Brazil. In 2007, when Brazil was
selected to host the 2014 World Cup, the federal government,
cities, and business leaders recognized that they needed to engage
in smart planning to make the event a success and bequeath a legacy
of improved infrastructure to the host cities. The Brazilian
Association of Infrastructure and Basic Industry, the Brazilian
Federal Ministry of Sports, and the Brazilian Football
Association
Munich’s acceleration of transportation and infrastructure
projects in preparation for the 1972 Games allowed the city to
hasten urban development by almost 10 years.
the 1992 Olympics. Similarly, the World Cup football successes
of Germany and South Africa also changed perceptions of those
countries globally. That might explain the fi erce competition
among bidders for mega-events—Beijing, for example, edged out 10
contender cities in its bid for the 2008 Olympic Games. It then
embarked on a fl urry of investment in new infrastructure.
According to the OECD, new construction will drive the bulk of
investment in most developing countries as governments strive to
expand their networks.30 Mega-events can certainly provide the
incentive for that investment, as they did in China,
sought an accurate picture of the cities vying to host the World
Cup events. Once they were able to identify gaps, they could
prioritize transformational new investments across the various
dimensions of infrastructure, such as energy, healthcare, security,
sanitation, transportation, seaports, airports, and
telecommunications. Local governments meanwhile are planning
transportation enhancements to better allow spectators to reach the
events in host cities. In Manaus, for example, offi cials have
embarked on one of Brazil’s most ambitious urban mobility projects
to date: a new monorail system that will benefi t residents and
businesses long after football fans have come and gone.
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14 PwC Game on: Mega-event infrastructure opportunities
The monorail project in Manaus represents an excellent example
of how a major event can impel long-term infrastructure investment
in a region that is already poised for transformation. As does Rio
de Janeiro’s Porto Maravilha urban regeneration project being
undertaken for the 2016 Olympics.
Also poised for transformation is Qatar, the small Middle
Eastern peninsula nation that juts above the east coast of Saudi
Arabia into the Persian Gulf. Winner of the 2022 World Cup football
bid, Qatar is slated to spend close to $70 billion on
infrastructure. The country has committed to building a new
airport, a new rail system including rapid transit, a new network
of roadways, and a bridge to neighboring Bahrain.31 Much of this
construction is part of Qatar’s long-term vision for transformation
by 2030. Renovation and stadium construction, of modular facilities
that can be dismantled, are expected to cost another $4 billion.
All the stadia will be equipped with high-technology, outdoor
air-conditioning systems to combat daytime summer temperatures in
excess of 100 degrees Fahrenheit, not uncommon in the Middle East.
To accommodate legacy planning,
government offi cials announced that the upper tier of several
of the stadia will be dismantled and shipped to countries that
currently lack football venues. The lower tiers will remain as
smaller facilities to host local sporting events.32, 33 As with
other successful mega-events, Qatar’s ambitious undertaking will
require collaboration with the private sector.
Public-private collaboration reduces risk
The most successful Olympics derive from close collaboration
between the public and private sectors, according to Michael Payne,
who served on the International Olympic Committee for 21 years.34
The Games represent an opportunity not just for the host city but
also for the private participants to make their mark—or strengthen
their position—on the world stage. The 1984 Los Angeles Games offer
a high-profi le example of private participation. After severe fi
nancial setbacks a few decades ago—such as the Montreal Games in
1976, originally estimated at $310 million, but with a fi nal tab
of $2 billion that took almost 30 years to pay off—many cities
shied away from hosting the Olympics. In fact, Los Angeles was the
only bidder for the 1984 Games. With almost no public fi nancing,
the Los Angeles Games relied on private funding to bridge the gap
for hosting the Games. The fi rst Olympics Games to pay for itself,
the Los Angeles Games turned a profi t of $223 million for its host
committee, the Los Angeles Organizing Committee of the
Olympic Games.35
Qatar expects to spend $70 billion on infrastructure
upgrades.
$70B
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15
The success of the Los Angeles Games has been replicated—and
improved upon—in the Games that followed. Private partners have
complemented public-sector know-how with additional funding,
expertise, and oversight. Take the example of Canada Line, a
12-mile regional rapid-transit line connecting downtown Vancouver,
the Vancouver International Airport,
Similarly, Vancouver’s Sea to Sky Highway project, also procured
as a PPP, was completed in time for the 2010 Winter Olympics. That
upgrade, also part of the region’s long-term plan, will most
certainly pay for itself, according to Norm O’Reilly, who served on
the board of the Canadian Olympic Committee (COC) from 1998 to 2002
and worked on operations with the COC for the 2010
and central Richmond in British Columbia. Although this new
light-rail system wasn’t part of the 2010 Winter Olympic bid, the
Games did serve as a catalyst for the project, which was completed
several months ahead of schedule as a PPP. Canada Line is the fi
rst transit project in North America to be developed as a PPP; it
had been part of the region’s long-term plan since the late 1960s.
Innovative tunnel design and a service plan to generate more
revenue from higher midday ridership resulted in proposed
construction cost savings equal to $85 million in net present
value. Ridership began tracking ahead of anticipated levels almost
immediately after Canada Line opened in August 2009.36, 37
Vancouver Winter Olympics. O’Reilly, a professor of sport
management at the University of Ottawa, explains that the upgrade
saves time as well as improves road safety on a highway that leads
to one of the most popular ski destinations in North America. While
the Games accelerated completion, O’Reilly says the upgrade itself
was “a no-brainer.”38
In fact, various levels of public-private partnerships have
evolved over the course of several decades of collaboration for the
Olympics. Already widely used in countries such as the UK and
Australia, they offer new opportunities for Brazil, Russia, and
Qatar to attract private sector participation in
infrastructure.
Best suited to large-scale infrastructure assets with ongoing
maintenance requirements, public-private partnerships can help
secure additional fi nancing, offer specialized expertise, and
better manage risk.
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16 PwC Game on: Mega-event infrastructure opportunities
In fact, the costs and benefi ts associated with mega-events
present ideal opportunities for public-private investment
partnerships that serve wider urban development goals. Deals that
are structured to be mutually benefi cial to both the public and
private partners are most likely to succeed because each partner
becomes an active stakeholder. Depending on the particular deal or
type of infrastructure investment, private partners sometimes
become long-term stakeholders. As cities encourage more
private-sector participation, they can realize the twin benefi ts
of improved access to capital and greater budgetary certainty;
well-structured contracts can allocate risks—related to cost
overrun, delay, and quality—to the private sector.
Infrastructure girds long-term prosperity
The impact of hosting major sporting events varies according to
the level of development in the host city and country, according to
Andrew Zimbalist, an economics professor at Smith College in
Massachusetts who has authored several books on sports economics.
Zimbalist says with proper planning, hosting a large event can
serve as a catalyst for infrastructure development, thus benefi
ting less developed areas more than those with a well-developed
infrastructure already in place.39
In Europe and Asia, for example, hosting events like the
Olympics, the Commonwealth Games, and
the World Cup are considered part of the process of local and
regional long-term development.40 Ultimately, residents and local
businesses in cities hosting mega-events benefi t over the long
term when city planners and regional leaders create and upgrade
supporting infrastructure in keeping with long-range plans already
in place for the region. The mega-event serves as a catalyst for
accelerated socioeconomic development, including securing sometimes
elusive funding. “The Olympic legacy is most effective and
pronounced where it goes with the grain of wider urban policies and
developments,” says Essex, the associate professor at the
University of Plymouth.41
That legacy of wider urban development, complete with supporting
infrastructure, indicates not only its energy in the present but
also its momentum for the future, as reinforced by a 2010 PwC
report on global cities.42 In fact, a 2010 World Economic Forum
report found that underinvestment in infrastructure is a top 10
economic risk for the entire global landscape because
infrastructure is the foundation of a region’s prosperity and
resilience.43A mega-event can accelerate infrastructure development
by a decade or more; when done in keeping with previously
established local, regional, and national plans, it can also afford
a region improved quality of life, competitiveness on the world
stage, and long-term economic gain.
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17
1 Andrew K. Rose and Mark M. Spiegel, The Olympic Effect.
National Bureau of Economic Research, October 2009.
2 Peter Kindel, Scott Watkins, and Andrew Hasdal, Land Use and
Infrastructure Investments by Olympic Host Cities: Legacy Projects
for Long-Term Economic Benefi ts,Topografi s & Anderson
Economic Group, LLC, October 1, 2009.
3 E-mail communication with Stephen Essex, associate professor
at the University of Plymouth, December 10, 2010.
4 Greg Clark, Local Development Benefi ts from Staging Global
Events, Organization for Economic Cooperation and Development,
2008.
5 Michael Payne, “A Gold-Medal Partnership,” Strategy+Business,
Spring 2007.
6 Greg Clark, Local Development Benefi ts from Staging Global
Events. Organization for Economic Cooperation and Development,
2008.
7 Lee M. Sands, “The 2008 Olympics’ Impact on China,” The China
Business Review, July-August 2008.
8 Sunil Jagtiani, “Track Record: Temporary Hurdle,” Fund
Strategy, September 1, 2008.
9 William C. Kirby, “Do Olympic Host Cities Ever Win? A Huge
Improvement for Beijing.” The New York Times, October 2, 2009.
10 Partnership for New York City, Grounded: The High Cost of Air
Traffi c Congestion, February 2009.
11 PwC, Cities of Opportunity, 2010.
12 National Audit Offi ce (UK), Preparations for the London 2012
Olympic and Paralympic Games: Progress Report February 2010,
February 26, 2010.
13 Ibid.
14 PwC, Gridlines, June 2010.
15 Interview with Mauricio Girardello, partner, PwC Brazil, May
26, 2010.
16 Mimi Whitefi eld, “For Next World Cup, Brazil Gets the Ball
Rolling” The Miami Herald, July 27, 2010.
17 “Do Brazil’s Infrastructure Plans Have a Sporting Chance?”
Project Finance, December 2009.
18 Sochi Organizing Committee, Position Statements, accessed
April 1, 2011.
19 Sochi 2014 Bid, http://Sochi2014.com/en/legacy/.
20 Department of Transport, Republic of South Africa, Transport
Action Plan for 2010, 2006.
21 PwC, Cities of Opportunity, 2010.
22 Organization for Economic Cooperation and Development, Policy
Brief: Infrastructure to 2030, January 2008.
23 New South Wales Treasury: Offi ce of Financial Management,
The Economic Impact of the Sydney Olympic Games, November 1997.
24 PwC, Business and Economic Benefi ts of the Sydney 2000
Games: A Collation of Evidence, 2001.
25 PwC, Cities of Opportunity, 2010.
26 Holger Preuss, The Economics of Staging the Olympics: A
Comparison of the Games 1972-2008, Edward Elgar Publishing Limited,
2004.
27 Metro Atlanta Chamber of Commerce, “Atlanta’s Olympic
Legacy,” http://www.metroatlantachamber.com/fi les/fi
le/communications/oly/fi nalolympiclegacy.pdf, accessed February
10, 2010.
28 Dahshi Marshall, “Do Olympic Host Cities Ever Win? A
Renaissance for Atlanta,” The New York Times, October, 2, 2009.
29 Metro Atlanta Chamber of Commerce, “Atlanta’s Olympic
Legacy,” http://www.metroatlantachamber.com/fi les/fi
le/communications/oly/fi nalolympiclegacy.pdf, accessed February
10, 2010.
30 Organization for Economic Cooperation and Development, Policy
Brief: Infrastructure to 2030, January 2008.
Endnotes
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18 PwC Game on: Mega-event infrastructure opportunities
31 Paul Kelso, “Hourglass Starts Running for Qatar to Vindicate
FIFA’s 2022 Gamble,” The Daily Telegraph, January 10, 2011.
32 Qatar 2022 Bid,
http://www.qatar2022bid.com/qatars-bid/legacy.
33 Matthew Futterman and Jonathan Clegg, “World Cup Headed to
Russia and Qatar,” The Wall Street Journal, December 3, 2010.
34 Michael Payne, Olympic Turnaround: How the Olympic Games
Stepped Back from the Brink of Extinction to Become the World’s
Best Known Brand, Praeger, 2006.
35 Michael Payne, “A Gold-Medal Partnership,” Strategy+Business,
Spring 2007.
36 Simon Kent, “Passing the Torch,” PM Network, December
2008.
37 PwC, Public-Private Partnerships: The US Perspective, June
2010.
38 Interview with Norm O’Reilly, professor of sport management
at the University of Ottawa, September 25, 2010.
39 Andrew Zimbalist, “Is it Worth It?” Finance &
Development, March 2010.
40 Greg Clark, Local Development Benefi ts from Staging Global
Events. Organization for Economic Cooperation and Development,
2008.
41 E-mail communication with Stephen Essex, associate professor
at the University of Plymouth, December 10, 2010.
42 PwC, Cities of Opportunity, 2010.
43 World Economic Forum, Global Risks 2020: A Global Risk
Network Report, January 2010.
Infrastructure investment: What works best?
a PwC, Business and Economic Benefi ts of the Sydney 2000 Games:
A Collation of Evidence, 2001.
b PwC, Gridlines, June 2010.
-
For a deeper discussion about mega-event infrastructure, please
contact our partners who have advised on global sporting events,
including:
World Cup, Germany 2006
World Cup, South Africa 2010
World Cup, Brazil 2014
World Cup, Russia 2018
World Cup, Qatar 2022
Olympics, Sydney 2000
Olympics, Beijing 2008
Olympics, Vancouver 2010
Olympics, London 2012
Olympics, Sochi 2014
Olympics, Rio de Janeiro 2016
GlobalCapital Projects & InfrastructureCarter PateUnited
StatesTel +1 646 471 [email protected]
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[email protected]
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